Transparency Register – Federal Office of Administration updates FAQs
Within a few months, the Federal Office of Administration (Bundesverwaltungsamt, “FOA“) has again updated its frequently asked questions about the handling of the transparency register (status: 20 February 2020) and published them on 31 March 2020 (“FAQ 2020/II“). In our blog post of 23 March 2020, we recently reported on the key information that the disclosure requirements under the relevant provisions of the Money Laundering Act (“AMLA“) regarding the transparency register should be known.
In the following we summarize the essential changes/clarifications of the FOA:
- Not all documents that can be electronically retrieved from the commercial register can justify the fiction of notification under Section 20 (2) AMLA. Information which is subject to registration and which does not result from the current or chronological imprint, but rather from annual financial statements, articles of association, minutes of company meetings or comparable documents, is expressly not suitable to trigger the fiction of notification.
- Parties subject to notification obligations must ensure that electronically retrievable lists of shareholders cover the entire period since the validity of the notification obligations towards the transparency register, i.e. since October 01, 2017. If this is not the case and an electronically retrievable list of shareholders was only deposited at a later date, the beneficial owner in the period in question must subsequently be reported to the transparency register.
- The FOA specifies a further application case for the notification fiction for limited partnerships (Kommanditgesellschaft): This should also apply if a limited partner (Kommanditist) fulfills two reasons of beneficial entitlement, so that in fact no other limited partner can be the beneficial owner. This concerns the following constellation of a limited & co. limited partnership (GmbH & Co. KG): If a limited partner is the beneficial owner due to his capital shares/voting rights and at the same time also due to the control of the general partner limited (Komplementär-GmbH), there can de facto be no other beneficial owner. Usage can be made of the fiction of notification. However, the electronically filed list of shareholders of the general partner limited must contain all necessary information.
- The FOA also specifies the notification obligation to the transparency register for preliminary companies (Vorgesellschaften) and companies in formation.
- Probably the most significant clarification of the FOA concerns subsidiaries of listed companies: While a listed parent company is exempt from the notification obligations due to its comprehensive disclosure obligations under the Securities Trading Act, those subsidiaries in which the parent company holds 75% of the capital shares or controls 75% of the voting rights should also be able to benefit from this. This would effectively rule out the possibility that the subsidiary has another beneficial owner. The FOA has now specified that the privilege described should not apply to subsidiaries if no natural person exercises a controlling influence on the parent company – which will probably be the rule for listed companies. Consequently, the legal representatives of subsidiaries of listed companies are now considered to be their notional beneficial owners. If their details have been properly filed in the commercial register and are available electronically, the subsidiary can make use of its own fictional notification. This means that subsidiaries of listed companies are now also required to check their shareholding chains and whether the information on their legal representatives in the public registers is up-to-date.
- Pleasing on the other hand is the change of position of the FOA to the effect that if the nationality of the beneficial owner is not stated in the transparency register, no discrepancy reports are to be submitted (applies with regard to the reports on beneficial owners made by the end of 2019) – provided that this is the only discrepancy. The FOA has thus abandoned its previous practice, which ultimately led to additional administrative work.
Still applies, what we already pointed out in our last blog: German companies are required to carefully examine whether and to what extent notifications to the transparency register are necessary – according to the new opinion of the FOA, this now also applies explicitly to subsidiaries of listed companies.
We will be pleased to advise and support you with regard to questions concerning your reporting obligations, the fiction of reporting and the determination of the beneficial owner, the submission of reports to the transparency register and any further questions in this context.